Palok Basu, J. - (1.) THE Deputy Labour Commissioner, Uttar Pradesh, Ghaziabad, on being satisfied that :- (a) A sum of Rs 100720/- as wages for the month of July, 1986 (b) A sum of Rs. 99680/- as arrears of bonus for the financial year 1984-85 total Rs. 2004200/- remained unpaid by an Industrial Establishment known as M/s. Harsha Tractors Loni Road, Mohan Nagar, Ghaziabad, issued a recovery certificate addressed to the Collector, Ghaziabad, for the said amount on 17-8-87.
(2.) IT appears that the aforesaid amount remaining outstanding, the workmen of the said Industrial Establishment initiated proceedings under section 3 of the Industrial Peace (Timely Payment of Wages) Act, 1978, hereinafter referred to as the State Act. Being thus satisfied that the said amount was in fact due, the recovery certificate was issued under section 3 of the State Act. M/s. Harsha Tractors Limited have thus filed this petition under Article 226 of the Constitution of India for a writ of certiorari praying that the said recovery certificate dated 17-8-86 be quashed. We have heard Mr. M. Katju, learned counsel for the petitioner, the learned Standing Counsel representing the State machinery and Sri K. P. Agarwala, Senior Advocate appearing on behalf of the two unions espousing the causes of the workmen impleaded as opposite party no. 3 and 4. The learned counsel for the petitioner has argued 5 points in order to challenge the said recovery certificate : Point No. 1: The State Act is ultra vires because its field of operation is occupied by the Central Legislation known as 'Payment of Wages Act, 1938', hereinafter referred to as the Central Act inasmuch as the President's assent has not been obtained. It is thus argued that the Central Act alone will continue to be operative. Point No. 2 ; The State Act is arbitrary inasmuch as it offends Article 14 of the Constitution of India and it affords neither a right of appeal nor an opportunity of hearing before issuing a recovery certificate. Point No 3 : Since the workmen had gone on illegal strikes which forced the petitioner to declare lock-out on 7-8-1986, no recovery can be made as regards their wages. Point No 4 : An application has been moved by the petitioners before the concerned authorities constituted under the provisions contained in the Sick Industrial Companies (Special Provisions) Act, 1985, for short, the 'Sick Company Act'. It is argued that the said application having been registered by the Secretary of the Board under the Sick Company Act the petitioner became a sick-industrial-company within the meaning of section 3 (o) of the said Act with the result that the recovery proceedings are bad in view of the bar imposed by section 22 of the said Act. Point No 5 : Since an application has been moved by the petitioner before the State of U. P. for exemption in payment of bonus as envisaged by section 36 of the Payment of Bonus Act, 1965, its non-payment cannot become the subject-matter of the recovery.
(3.) THE learned Standing Counsel as well as the learned counsel for the opposite parties have argued that none of these points are available to the petitioner and the petition should be dismissed. We would like to take up the first three points together. Point No. 1 Point No 2 and Point No 3 : The main contention of the learned counsel for the petitioner is that sub-section (2) of Article 254 of the Constitution provides, inter alia, that where a law made by the legislature of State with respect to one of the matters enumerated in the "concurrent list", containing provisions repugnant to an earlier or existing law made by the Parliament, the law so made by the State Legislature of such State shall operate in that State only when it has been reserved for consideration of the President and has received his assent. It is further argued that while section 5 of the Central Act provides that the wages of every person employed in Industrial Establishment shall be paid by the 7th day of the succeeding month, section 3 of the State Act provides that the Labour Commissioner, if satisfied that an industrial establishment is in default of payment of wages exceeding Rs. 50,100/- will issue a certificate under his signature for realisation by the Collector who will realise it as arrears of land revenue. Both the enactment, it is argued, occupy the same field. It is further argued that the State Act would be covered only by entries 22 or 23 or 24 of the List III (Concurrent List) and not in any of the items mentioned in List II (State List). The learned counsel for the respondent on the other hand argued that the State Act is covered by entry I in the State List and the State Act operates in entirely different fields and, therefore, the assent of the President was not needed. After giving our anxious consideration to the entire matter, we are of the opinion that the argument advanced by the learned counsel for the petitioner has no force. A close examination of the provisions contained in the State Act would reveal that the Labour Commissioner of the State (including an officer not below the rank of Assistant Labour Commissioner) alone has been empowered to take the action under section 3 of the State Act. The Labour Commissioner while issuing a recovery certificate assumes all powers of a civil court by virtue of section 4 of the State Act. It may be noted that the State Act was passed with the objective of doing away with the delays in payment of wages of workmen which often led to simmering discontent amongst the workmen thus providing grave threat to law and order. The provisions of the Central Act were found to be inadequate to ensure the timely payment of wages. The incidence of disturbance of industrial peace being greater in comparatively bigger establishment, it was thought necessary to provide that if the wage bill in default exceeded Rs. 50,000/- the amount should be recoverable as arrears of land revenue. Such a default has also been made an offence under the State Act punishable with rigorous imprisonment for three months. We thus find that the provisions in the Central Act differ in the pith and substance from the provisions contained in the State Act and they do not overlap. The State Government rightly categorised non-payment of wage-bill of more than Rs. 50,000/- as a public order problem. In a big industrial establishment, employing large number of workmen, chances of violance flaring up due to default in releasing of wages are far more greater than smaller units. The likelihood of public order being disturbed in such cases appear too imminent. The learned counsel has drawn our attention to the following two authorities :- (1) AIR 1959 SC 544-Hon. Mr. Justice Hidayatullah (as his Lordship then was) observed in Para 14 ".........and there being thus no question of repugnancy or occupied field, we have no hesitation in holding that the Act is fully covered by the first cited Entry and conceivably the other in the State List." This Authority, therefore, is of no assistance to the petitioner's counsel and, even on facts, the case is distinguishable. (2) AIR 1977 SC 908-Hon'ble Mr. Justice A. N. Ray, the Chief Justice, observed in para 23- " The expression "Public Order' is of wide connotation which it is meant to provide as the very first Entry in List II............" In para 24 it has been observed " Thus if an attempt is made to raise communal passion......it would......... give rise to an apprehension of breach of the public order, affecting the community at large." This case also goes contrary to the arguments raised by the learned counsel for the petitioner. The State Act thus squarely falls within entry I of the State List and consequently the President's assent was not at all necessary. Both the Central Act and the State Act occupy different fields and should be left intact to have full play in their respective fields. It is next argued that the Central Act affords opportunity to an establishment to show cause and plead defence and then provides a right of appeal under section 17. The provisions contained in the State Act do not extend such an opportunity and that no appeal lies to any authority against issuance of the recovery certificate hence the entire State Act is ultra vires Article 14 of the Constitution, and, it further violates principles of the natural justice. We do not see any force in this argument either. We, however, find that the State Act has provided sufficient safeguards and this argument of the learned counsel for the petitioner has also to be rejected on this ground alone. In order to first ascertain the correctness of the allegations of default in payment of wage bill, the Labour Commissioner is empowered to use the powers of a 'Civil Court'. He can examine such witness on oath and also examine such documents as he thinks necessary. Moreover, a high ranking officer of the status of the Labour Commissioner is normally not expected to act in a manner contrary to sections 3 and 4 of the State Act. If in some case, abuse or misuse of power is established the hands of law and the courts are long enough to check the same and quash the recovery certificate. Incidentally, in the instant case the petitioner has not challenged the correctness of the amounts shown as outstanding in the certificate. Moreover, section 8 of the State Act empowers the Government to make rules for carrying out the purpose of the State Act. In exercise of these powers, by virtue of Notification No. 2476 (III)/XXXVI-2-102/(A) (SM)-77 dated July 30, 1981, the State of U. P. framed U. P. Industrial Peace (Timely Payment of Wages) Rules, 1981. Rule 3 makes it incumbent upon an industrial establishment to intimate the name of the occupier of the establishment. Rule 4 provides that on receipt of information about the default of payment of wages exceeding Rs. 50,000/- a Labour Commissioner shall serve a notice on the occupier for the purposes of ascertaining the wage bill and also ask him to furnish information in Form III. Then only the Labour Commissioner shall forward a certificate in Form No. IV to the Collector specifying the amount of wages due from the industrial establishment concerned, it further provides that the amount so realised shall be placed at the disposal of the Labour Commissioner who shall disburse it himself or through the occupier concerned amongst the workmen, account of which shall be maintained in Form V. A combined reading of sections 3 and 4 of the State Act and Rules 3 and 4 of the Rules makes it abundantly clear that full opportunity is available to an industrial undertaking to place its own case before the Labour Commissioner and it is only when the actual wage bill is ascertained that the recovery certificate is issued. Thus there is absolutely no substance in the argument of the learned counsel for the petitioner that the Act does not afford reasonable opportunity of defence or that the principles of natural justice are violated. As regards the right of appeal, nobody can have a grudge if a particular statute does not confer the right of appeal upon the persons who may be affected by an order under the Act. Obviously, if prosecution is launched, and conviction is recorded as envisaged by section 6 of the State Act and a penalty is imposed as provided under section 5, right of appeal and revision shall be available under section 374 read with sections 376 and 397 of the Criminal Procedure Code as the case may be. The Legislature has in its wisdom, not provided for any appeal against the issuance of a Recovery certificate for the obvious reason that the Labour Commissioner will be the best Judge as to the legal and factual position of the claims and counter-claims regarding the outstanding wage-bill, and, in case there would be semblance of doubt about the due amount, we are sure, no recovery certificate would be issued. Again, it is the question of timely payment of wages which is of paramount importance at that crucial hour which, under the relevant labour laws, cannot be denied or refused except on valid ground. At this stage we are reminded of the observations of the Supreme Court : "Rules of natural justice are not rigid rules. They are flexible and their application depends upon setting and the background of statutory provisions. Nature of the right which may be effected and the consequence which may entail its application depends upon the facts and circumstances of each case." (See R. S. Das v. Union of India, 1986 SCC Supp. 617). Thus having regard to the object sought to be achieved viz. timely payment of wages, there are ample safeguards in the statute to protect the employees' rights. Hence we decide these three points in the negative. Point No. 4 and Point No. 5 may also be conveniently taken up together for consideration. The argument of the learned counsel for the petitioner is that since an application has been made under the provisions of Sick Companies Act the impugned certificate could not be issued. In this connection reliance has been placed on a copy of the application purported to have been issued by the petitioner addressed to the Secretary, Board for Industrial and Financial Reconstruction, New Delhi, filed as Annexure R. A. 1 to the rejoinder affidavit sworn by N. R. Kohli, Factory Manager of the petitioner. Paragraph 17 of the said affidavit reads as under :- "The petitioner had made an application under section 15 of the Sick Industrial Companies (Special Provisions) Act, 1985, and an inquiry is pending under section 16 of the Act. Photostate copy of the covering letter dated 25-8-1987 of the petitioner is attached as Annexure R. A. 1 to this rejoinder affidavit." A supplementary affidavit has also been filed by the petitioner along with an application on 11-11-87 for addition of a ground to the effect that "because in view of section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985, no proceedings can be taken against the petitioner". The said application was allowed by us. Along with the supplementary affidavit copy of an application purporting to be in accordance with rule 19 framed under the Sick Industries Act has also been filed as Annexure 'A'. A copy of the letter purporting to have been issued by the Registrar, Board of Industrial and Financial Construction, New Delhi, has been filed as Annexure 'B' indicating that "the case of your company has been registered at registration no. 210/87 for further proceedings in accordance with law." But for these, no other material has been furnished in order to establish that any inquiry has been instituted under the provisions of sections 15 and 16 of the Sick Industries Act. In the absence of any such averment it is impossible to record a finding that an inquiry as envisaged by the Act has been initiated. Merely making an application and its registration does not result in the pendency of inquiry as provided in section 16 of the said Act so as to immediately attract section 22 of the Sick Industries Act. The learned counsel for the petitioner has, however, referred to a judgment of a learned Single Judge dated 18-11-1987 in Company petition No. 17 of 1987. In fact, a close examination of the reasonings recorded by the learned Single Judge go contrary to the arguments advanced by the learned counsel for the petitioner. In that case it has been held that : "Looking to the scheme of the Act after reference under section 15 of the Act has been made and the same having been registered the Board cannot decline to inquire into the matter. It may on inquiry come to the conclusion that (he application for treating the company concerned as sick unit is not acceptable and thus rejected the application but it cannot be said that the Board has discretion riot even to inquire specially after reference being registered and after nominating a Bench of the Board (emphasis supplied). The case is distinguishable on facts. The distinction is that in the above case not only was the reference registered but a 'Bench' of the Board had also been nominated. Registration of a reference is under Regulation 19 of the Regulations framed under section 13 of the said Act is a purely ministerial Act. It is only after the Board deems it fit under section 16 (4) of the Act to make an enquiry into the industrial company and thereupon appoints a Special Director or Special Directors that an enquiry can be properly said to be pending within the meaning of section 22 of the Act. We do not agree that registration of the application by itself can make the enquiry pending. No benefit under section 16 read with section 22 of the Sick Companies Act, can, therefore, be claimed by the petitioner at this stage. Mixed with the aforesaid point is the argument that since the petitioner has made an application under section 36 of the Payment of Bonus Act, 1965, the recovery of due bonus cannot be made. A true copy of the application has been filed as Annexure 2 to the writ petition. This application has been made on Nth of August, 1986, and no averment whatsoever exists in the petition as to what has happened to the said application and whether or not the said application has been decided or is pending. There is no material on the record which may enable us to conclude that exemption has been granted to the petitioner from paying the due bonus to its workmen. We may hasten to add that during the course of arguments the learned counsel for the petitioner mainly insisted upon point nos. 1, 2 and 4. Therefore, we find that the filing of the application claiming exemption under the payment of Bonus Act extends to advantage to the petitioner whatsoever. Hence, these two points also do not rescue the petitioner from the recovery proceedings.;